Correlation Between Boise Cascad and OPC Energy
Can any of the company-specific risk be diversified away by investing in both Boise Cascad and OPC Energy at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Boise Cascad and OPC Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Boise Cascad Llc and OPC Energy, you can compare the effects of market volatilities on Boise Cascad and OPC Energy and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Boise Cascad with a short position of OPC Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Boise Cascad and OPC Energy.
Diversification Opportunities for Boise Cascad and OPC Energy
0.36 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Boise and OPC is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Boise Cascad Llc and OPC Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on OPC Energy and Boise Cascad is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Boise Cascad Llc are associated (or correlated) with OPC Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of OPC Energy has no effect on the direction of Boise Cascad i.e., Boise Cascad and OPC Energy go up and down completely randomly.
Pair Corralation between Boise Cascad and OPC Energy
Considering the 90-day investment horizon Boise Cascad Llc is expected to generate 1.05 times more return on investment than OPC Energy. However, Boise Cascad is 1.05 times more volatile than OPC Energy. It trades about 0.07 of its potential returns per unit of risk. OPC Energy is currently generating about -0.02 per unit of risk. If you would invest 6,600 in Boise Cascad Llc on January 20, 2024 and sell it today you would earn a total of 6,760 from holding Boise Cascad Llc or generate 102.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 79.19% |
| Values | Daily Returns |
Boise Cascad Llc vs. OPC Energy
Performance |
| Timeline |
| Boise Cascad Llc |
| OPC Energy |
Boise Cascad and OPC Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Boise Cascad and OPC Energy
The main advantage of trading using opposite Boise Cascad and OPC Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Boise Cascad position performs unexpectedly, OPC Energy can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in OPC Energy will offset losses from the drop in OPC Energy's long position.| Boise Cascad vs. Eagle Materials | Boise Cascad vs. Cementos Pacasmayo SAA | Boise Cascad vs. James Hardie Industries | Boise Cascad vs. United States Lime |
| OPC Energy vs. Doral Group Renewable | OPC Energy vs. Elbit Systems | OPC Energy vs. Electreon Wireless | OPC Energy vs. Delek Group |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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